Introduction

The Indian Trademarks Act, 1999, provides a comprehensive legal framework for the registration, protection, and enforcement of trademarks in India. Among its provisions, the Act includes mechanisms to challenge and cancel trademarks that are not in use. The non-use cancellation action is a crucial aspect of trademark law as it ensures that registered trademarks are actively used in commerce and prevents trademark squatting.

Legal Provisions

Section 47 of the Indian Trademarks Act

The primary provision governing the non-use cancellation action is Section 47 of the Indian Trademarks Act, 1999. This section allows any person aggrieved by the non-use of a registered trademark to apply for its cancellation on the grounds specified therein.

Grounds for Cancellation

Section 47 outlines two specific grounds for the non-use cancellation of a registered trademark:

  • Non-Use for Five Years (Section 47 (1) (a): If a registered trademark has not been used in relation to the goods or services for which it is registered for a continuous period of five years and three months from the date of registration, it can be cancelled. This ground ensures that trademarks are not kept on the register without being put to genuine use.
  • No Bona Fide Intention to Use (Section 47 (1) (b): If the trademark was registered without any bona fide intention to use it in commerce and there has been no genuine use of the mark up to a period of three months before the date of the application, a continuous period of five years from the date on which the trademark is actually entered in the register or longer had lapsed, it can be cancelled.

Procedure for Filing a Non-Use Cancellation Action

Who Can File?

Any person, aggrieved by the non-use of a registered trademark can file a cancellation action. This includes competitors, potential users of the mark, or anyone who has a legitimate interest in the removal of the unused mark from the register. The Delhi High Court in the case of Kia Wang v. Registrar of Trademarks, emphasized the definition of “aggrieved party” to be the same interpretation that was manifest in the landmark Hardie Trading Case of 2003 passed by the Supreme Court. The Apex Court held that an "aggrieved person" is someone who has a genuine and substantial interest in the use of the trademark or whose legal rights are affected by the existence of the trademark on the register. The Court emphasized that the term should not be narrowly interpreted. It is not confined to a person who has been directly injured or suffered damages but also competitors and others whose business interests might be affected by the registration.

In Rong Thai International Group Company Limited v. Ena Footwear Private Limited, the Delhi High Court was considering a cancellation action on the ground of non-use. The petitioner, Rong Thai International sought cancellation of the 'BAOJI' trademark under Section 47 of the Trademarks Act, 1999, alleging non-use. The respondent countered the action by submitting evidence in the form of invoices during the relevant period. The High Court while dismissing the cancellation petition held that the petitioner failed to provide sufficient evidence to support the claim of non-use. The Court reaffirmed that the burden of proof lies on the party alleging non-use, and mere allegations would not suffice to invalidate a trademark.

In the Shell Transource Limited v. Shell International Petroleum Company Ltd.¸ it was observed by the Intellectual Property Appellate Board (IPAB) that the onus of proving "non-user" is on the person who pleads the same. However, when the applicant pleads "non-user", the respondent must specifically deny it. Therefore, in the absence of a specific denial, it was held that the allegations of "non-user" stood admitted.

Application Process

The process for filing a non-use cancellation action involves the following steps:

Filing the Application: The aggrieved party must file an application for cancellation with the Registrar of Trademarks. The application should specify the grounds for cancellation and be supported by relevant evidence. 

  • Notice to the Trademark Owner: Upon receiving the cancellation application, the Registrar sends a notice to the trademark owner, informing them of the cancellation action and giving them an opportunity to respond.
  • Owner's Response: The trademark owner may file a counter-statement, providing evidence of the use of the trademark or reasons for its non-use.
  • Hearing and Decision: After considering the evidence and arguments from both parties, the Registrar conducts a hearing and decides whether to cancel the trademark registration.

Evidence of Use

In a non-use cancellation action, the burden of proof lies on the trademark owner to demonstrate that the mark has been used in commerce. The evidence of use should be genuine and not token. Acceptable forms of evidence include:

  • Invoices and sales receipts showing the sale of goods or services under the trademark.
  • Advertising and promotional materials bearing the trademark.
  • Affidavits from retailers, distributors, or customers confirming the use of the trademark.
  • Photographs of products or packaging displaying the trademark.

Defences Against Non-Use Cancellation

The trademark owner can raise several defences against a non-use cancellation action:

  • Special Circumstances: If the non-use was due to special circumstances beyond the control of the trademark owner, such as import restrictions, war, or natural disasters, they may argue that the non-use was justified. The judgement of the Supreme Court in Hardie Trading Ltd. v. Addisons Paint and Chemicals Ltd, is relevant here, as it elaborates on the consideration of special circumstances that may justify non-use of a trademark, providing an exception to the general rule of cancellation for non-use. In this case the Supreme Court clarified that factors like economic impracticality, including trade restrictions or difficulties caused by government policies (such as import restrictions), could qualify as special circumstances. The Court overruled the lower court's decision, emphasizing that import restrictions, which were beyond the control of Hardie Trading Ltd., should be considered valid grounds for justifying the non-use of the trademarks.
  • Use in a Different Form: If the trademark has been used in a slightly modified form that does not alter its distinctive character, it may still be considered genuine use.
  • Preparations for Use: If the owner can show that they have made genuine preparations to use the trademark in the near future, this may be accepted as a defence.

Consequences of Cancellation

If a trademark is cancelled due to non-use, it means that the trademark owner loses all exclusive rights to the mark, and it becomes available for use and registration by others. The cancellation also serves as a warning to other trademark owners to ensure that their marks are actively used in commerce.

Conclusion

The non-use cancellation action under the Indian Trademarks Act, 1999, plays a vital role in maintaining the purity of the trademark register. It prevents the hoarding or trafficking of trademarks and promotes their active use in commerce.